The goal of public employee pensions is twofold: to provide a safe and secure retirement for our valued state employees and to help recruit and retain talented individuals into public service careers. Unfortunately, many of Missouri’s public employee pension systems have flaws that make it difficult to achieve either of these tasks.

Pension plans for state and local government employees have become increasingly underfunded in recent years, with total shortfalls nationwide ranging from approximately $1 trillion to more than $4 trillion, depending on how plan liabilities are measured. Annual required contributions have more than doubled over the past decade, and many plan sponsors were unable to make required contributions during the recession that began with the financial crisis of 2007 and the slow recovery that followed.

Closing defined benefit plans reduces or prevents the accumulation of additional unfunded liabilities. There are many reasons elected officials may favor or oppose shifting public employees out of traditional defined benefit pensions into cash balance or defined contribution plans. But concerns over so-called “transition costs” are largely mistaken and should not stand in the way of public employee pension reforms.

Missouri and around the country, elected officials, taxpayers, and financial markets have expressed concerns about the financial health of defined benefit pension plans for state and local government workers. Public employees also are concerned, as many rely heavily upon these plans for income in retirement.

State and local employees in Missouri typically are eligible to receive pension benefits upon retirement; the particular pension each worker is eligible for depends on the employer and the position. In this paper, we examine the return performance of five Missouri pensions ...

During the 2006-07 school year, Missouri implemented a new method to fund K-12 public schools. The new foundation formula was the Missouri Legislature’s response to legal challenges brought against the previous formula regarding equity and adequacy. The new foundation formula sought to rectify those problems by elevating funding to adequate levels in all school districts and by leveling the playing field between property-rich and property-poor districts. Though the entire formula is detailed in chapter 163 of Missouri’s revised statutes, it can be very difficult to understand. This primer has been written to help Missourians better understand how their schools are funded.

Some advocates in Missouri would like to see the state’s minimum wage increased to as much as $ 8.25, and to index it to the rate of inflation so that it will continue to climb in subsequent years. If Missouri was to increase the minimum wage to that level, it would be higher than all but one of its surrounding states. The main argument proffered in favor of a minimum wage increase is that it will help poor and low-income families. But a higher minimum wage is unlikely to achieve this goal.

A higher minimum wage will likely reduce employment among the very low-wage, low-skilled workers that minimum wage proponents are trying to help. A large body of research illustrates the disemployment effects of minimum wage.

Moreover, even if many workers affected by a higher minimum wage would see increased wages and suffer neither reductions in employment nor hours, minimum wages may do little or nothing to help poor and low-income families. Minimum wage laws mandate high wages for low-wage workers, rather than higher earnings for low-income families. But low-wage work and low family income are quite distinct, because many minimum wage workers are in higher-income families, and many poor families have no workers.

Mandating higher wages for low-wage workers in high-income families, such as teenagers from welloff families working a summer job, does nothing to help poor and low-income families. Indeed, if the job losses from a higher minimum wage are borne by minimum wage workers in poor, low-income families, minimum wages can have unintended harmful distributional effects — possibly increasing the number of poor or low-income families. Reflecting these issues, research fails to establish that higher minimum wages help poor or low-income families.

These are perennial issues in debates about a higher minimum wage. In the current economic environment, with unemployment remaining high and job growth fairly stagnant, it may be far wiser for policy to focus on increasing employment among the unemployed, rather than trying to increase the wages of the employed.

Tax Increment Financing (TIF) has become a common economic development
tool throughout the United States. TIF takes the new taxes that a development
generates and directs a portion of them to repay the costs of the project itself.
Missouri is one of many states where TIF is authorized for purposes of combating
blight, engaging in conservation efforts, fostering economic development, or a
combination of those factors.

Supporters of TIF argue that it is a necessary tool for redevelopment in older
communities. Detractors contend that it is used to simply subsidize development,
and that variances in tax systems allow some governments to implement and benefit
from TIF even if its use harms other levels of government.

This study provides an overview of the history and basic structure of TIF. It then
analyzes the basic tax components of a TIF plan and compares how various aspects,
such as tax capture and tax competition, play out in the standard system of TIF. The
study then reviews the economic literature on TIF, and ends with a direct application
of how TIF operates within Missouri.

The decade of 2000 to 2009 saw changes in domestic migration trends in America. These changes saw an increase in domestic migration away from the coasts and to the interior, or heartland, of America. The well-documented increase in housing costs was one of the primary drivers of that change. While housing costs increased everywhere, they increased much more substantially along the coasts, especially the West Coast. The Saint Louis metropolitan area was one of the beneficiaries of this new migration trend.

Saint Louis, Mo., has one of the United States’ most affordable housing markets. One of the reasons for the affordable housing in Saint Louis is the lack of centralized planning by governments in the area. The greater Saint Louis metropolitan area should position itself to continue to benefit from these domestic migration trends by limiting the planning requirements it imposes on homebuilders and developers.

That lack of government regulation and planning and the resulting lower housing costs leads to a lower overall cost of living for residents of the Saint Louis area. There is evidence that the more affordable cost of living is making Saint Louis more attractive to outsiders and resulting in growth for the entire region.

Tax incentives are among the main instruments of state and local economic development policy, and tax credits are among the most prevalent types of tax incentive. Tax credits come in many forms and serve an array of purposes, although economic development is central to their existence. The purpose of this paper is to summarize the findings in the economics literature on the effectiveness of state tax credits in spurring economic development. The context for this survey is the establishment of an official commission to review Missouri’s tax credit programs with the purpose of streamlining and consolidating the state’s myriad tax credit programs. The commission’s efforts are certainly worthy, and its report contains many eminently sensible suggestions, but its proceedings avoided the extremely important question of whether or not the tax credits have been, or even can be, effective. This survey is a contribution to a clearer understanding of this issue.

The remainder of this paper surveys the state of the academic literature regarding the effectiveness of economic development incentives, with particular attention paid to state tax credits. The next two sections describe the basic structure of tax credits and their use in Missouri. Sections 4 and 5 discuss the use of development incentives in general, first outlining the economic efficiency arguments in their favor and then summarizing the literature estimating their effects. Section 6 describes the literature dealing specifically with the effects of tax credits, and the final section provides three broad conclusions drawn from this literature.

This essay discusses the costs and benefits of the proposed Aerotropolis tax credit legislation currently before the Missouri legislature. The main purpose is to provide a methodology for evaluating whether state tax credits and direct export subsidies are warranted in this case. In order to do so, I first review the traditional arguments for state intervention in a market economy. With the potential exception of so-called agglomeration externalities, the traditional arguments for state subsidization are found irrelevant with respect to the Aerotropolis project. Simply stated, there seemingly exists no market failure on which one may justify government intervention in support of an Aerotropolis at Lambert-St. Louis International Airport (Lambert).

Local governments in Missouri are primarily funded by property taxes. Property taxes are an ad valorum tax, which means they are based on the value of the real estate or other property being taxed. Taxable property in Missouri is appraised at its market value, a ratio is applied to the market value to determine the taxable — or assessed — value, and a tax rate is then applied to that value determining the amount owed in taxes. Property taxes fund schools, counties, cities, fire districts, libraries, and other types of smaller taxing districts.

In 2010, four different people tried to buy 2925 Union Blvd., a vacant city-owned property. All four were told no. The city’s refusal to sell 2925 Union is by no means unique: More than 9,000 parcels like this one are owned by the city, and even though there are offers to purchase many of them, most aren’t being sold.

This study addresses an important issue with implications for public policy: retirement plans. It compares defined benefit (DB) and defined contribution (DC) retirement plans in order to assess whether the recent trend toward DC plans is, on balance, beneficial to workers. It further identifies policies — both public and private — that would make retirement plans more effective, with the goal of advancing liberty and responsibility.

It is widely believed that fiscal policy plays an important role in determining economic growth, but the specific policies that would best foster growth are hotly debated. This study provides a review of the recent economic literature that examines the effect of government fiscal policy actions on economic growth. Because the effect of changes in tax and spending programs may take a long period of time to become evident, the findings of the studies reviewed here are based on data taken from across a large sample of countries. Despite the justifiable belief that fiscal policy does influence economic growth, interpreting the empirical evidence from aggregate cross-country data turns out to be less than straightforward. Even so, stepping back and considering the accumulated evidence reveals a robust conclusion from the data: Distortionary taxes on personal income or corporations have a strong negative effect on investment and, therefore, slow the rate of economic growth.

Superintendents hold a particularly important position in school districts, in charge of both fiscal and organizational management. In 2009, Missouri's public school superintendents earned an average of $105,717, an amount that increased even during a recession, to $106,368 in 2010. These figures represent salary alone, but benefits such as health insurance, annuities, and automobile allowances can substantially increase total compensation. Once these other benefits are taken into account, a superintendent's non-salary compensation can equal 50 percent of his or her actual salary. This study uses contracts and salary data to determine what connection there is, if any, between superintendent pay and student achievement, which factors determine compensation, and how Missourians can take action if they are unhappy with compensation practices.

This study provides a review of the academic literature that has examined the relationship between taxation and economic growth, with an emphasis on the taxation of income. The study provides reliable information that may inform policy options.

Since Minnesota passed its pioneering charter school legislation in 1992, charter schools have emerged as a popular way to provide public education beyond the traditional public school model. By 2007, 40 states and the District of Columbia had authorized charter schools, and more than 4,000 charter schools were serving more than 1,200,000 students. By design, charter schools are publicly funded, but independently operated.

In February 2009, Congress dedicated $8 billion of stimulus funds to high-speed rail projects. In April 2009, President Barack Obama released his high-speed rail vision for America, which includes 8,500 miles that the Federal Railroad Administration had identified as potential high-speed rail routes in 2001. In June, the FRA announced its criteria for Missouri and other states to apply for high-speed rail grants out of the $8 billion in stimulus funds. Yet the FRA has no estimates of how much high-speed rail would ultimately cost, who would ride it, who would pay for it, and whether the benefits can justify the costs. A realistic review shows that high-speed rail would be extremely costly and would add little to American mobility or environmental quality.

The Constitution of Missouri includes more provisions addressing the property rights of citizens than that of any other state. The careful restrictions it places on the use of eminent domain show that, in ratifying the Constitution, the people of the Show-Me State intended to prevent the abuse of eminent domain to benefit private parties. Despite these protections, however, few states today have so dismal a record of eminent domain abuse as Missouri. And, in 2008, despite the constitutional and statutory restrictions on the government’s ability to take one person’s home, business, or house of worship and give it to another private owner, the Missouri Supreme Court chose to expand the power even further, placing the property rights of all Missourians in even greater jeopardy.

In 1960, the private sector funded more than three quarters of the nation’s health care expenditures. Individuals paid nearly one half of total national health care expenditures through out-of-pocket expenditures. Beginning in 1967, the way health care is purchased in the United States began to reverse. This has resulted in a large and growing government “health care wedge” — an economic separation of effort from reward, of consumers (patients) from producers (health care providers) — caused by government policies. Rising government expenditures for health care are the main factor driving the growth of this wedge, which is a primary driver in rising health care costs, i.e., inflation in medical costs. Federal proposals for health care reform currently under consideration would exacerbate these problems, rather than solve them.